REPORT #486 May 2002
THE USA EMBARGO ON CUBA AND CUBAN POVERTY AND LACK OF
MEAT!

Produced by the Belize
Development Trust

by Ray Auxillou

The online version of the morning show interview with
the Prime Minister, on economic growth and social
programs was limited in description.

Basically, Belizean economic growth can be measured
by the annual revenue and debt of government. I think
it was around $372 million for last year as revenue.
And historically, if memory serves me, the low range is
around $280 million and the high was around $460
million annual revenues. So that basically puts last
years economic growth in more of a holding pattern. We
are holding our own economically with population
growth, but not actually gaining anything as far as
economic growth is concerned. But then again, we are
not losing any ground in economics, which is a story of
itself and nothing to sneeze at as an achievment.
Except some would argue that it was done with printing
more money and increasing the debt, which is negative,
or will be down the line as a result? How this plays
out remains to be seen?

The Prime Minister however, was talking about youth
training programs on Radio Station Love FM and the
marginilized poor and one has to believe he is probably
talking to and about the population of one town, Belize
City. The seat and core of political party power. He
needs the poor votes in the port town. With elections
coming, the hard sell is on!

Social programs and endeavors to help the
marginalized poor of any society is an intriguing
subject. But before we get into even the basics, we
probably should consider that last years statistics of
the United Nations, show that despite a consistant
level of unemployment and a more or less fixed ratio of
marginalized poor, or unemployed uneducated persons in
successful nations. The ones who spend the most and
succeed the greatest with social programs are the
capitalist run countries. Much to the chagrin of those
socialists, or socialist governments who so strongly
profess to be dealing with their social services for
equality for all of their population.

It brings to mind, my debate with a couple of
Political Scientists in a group at the Costa Rican Bak
Pak Hostel last week in San Jose, the capital. They
had some European misconceptions. After a recent
vacation in Cuba, they were convinced by Cuban
propoganda that the poverty of Cuba was the fault of
the USA embargo. The historical reason for the USA
embargo to Cuba has reasons of it's own. But basically
the Communist Party of Cuba stole all the private
assets of business and private owners in 1959 and never
paid any financial recompense as is done in a
democracy. It is all right to take property for the
greater public good, but general democratic principals
say the government that does so, should pay market
value for it, to the previous owners, to make such a
process ethically correct. Castro and his Communist
Party however, just stole everything in the country and
never paid anything to anybody. Hence the embargo!

Does the Embargo create poverty in Cuba? That is a
nonsense argument of course, but the two Danish
political scientists did not seem to understand that.
Anything Cuba wants to buy that is made in the USA,
they can equally buy from USA branch foreign companies
in Europe, or elsewhere if they so desire. So the
embargo punishes only USA manufactures at home in the
USA. It hinders not anybody in Cuba. In Belize for
instance, imports of manufactured goods has shifted
from European countries and the UK; to Hong Kong,
Taiwan, Japan and India for manufactured goods and
machinery. The next Danish argument was about meat.
Apparently, the Cuban citizen, or family gets a few
ounces of meat alloted by coupons, as a food ration,
once a week. I fail to see how the US Embargo effects
the supply of meat in Cuba? Denmark produces a lot of
meat exports for foreign trade, so why do not Cubans
buy from Denmark instead of the USA? That they do not
produce all the meat that Cubans can eat and export
some, is a fault of a Communist Party bureaucratic
state planning process; that did not work in the Soviet
Empire and does not work in Cuba either. Anybody who
understand economics, instinctively knows bureaucratic
state planning cannot make a successful economy. Even
under old capitalist Cuban style dictatorships, the
grocery shops in Cuba were full of meat and the
majority of the people ate all they could afford in
the old days pre-Castro. Some could not of course, the
very poor, but nowadays EVERYBODY in Cuba is poor and
cannot eat meat. Only the Communist Party hacks get
all the meat they want. In Costa Rica last week, the
average peasant farmer with his own land was gobbling
meat meals in restaurants where I watched, in fantastic
proportions compared to my own plate of food.

Different political managing system, capitalism versus
state bureaucratic political planning. The results are
different for very good established pyschological
reasons.

The argument of the socialists is; that resources are
better spent on education and medical treatment for the
population of Cuba, than spent on producing meat. This
is no answer of course to anything! It does not even
begin to address the problems and differences in
political action cause and effect. Economic growth,
meat on the store shelves and meat on a Cuban citizen's
plate, three times a day if they want it, depends on
one thing only. That thing is called SELF INTEREST!
Self interest translates into the word PROFIT.

To some, PROFIT is an ugly word. But then they are
ignorant of the power of profit. In the goal to supply
the maximum social services to the greatest number of
people in any country, PROFIT systems are the only ones
that do the best. This, the United Nations reports
show quite well. In the seeking of profit, for self
interest ( material goods and toys ) the controlling
mechanisms to simplify things are SUPPLY and DEMAND.
These two things, regulate the amount of profit, not
state controlledl prices, or state controlled
production.

Now if the political bureaucratic planning system of
Cuba would allow a Cuban entrepreneur to own some 100
acres of land, now currently under sugar cane
production and sell him some cattle; then in ten years
time, there would be more meat available for the table
of individual Cubans. Since currently DEMAND is
greater than a politically controlled bureaucratic
SUPPLY, there would be excellent PROFIT, due to high
prices the farmer would be able to charge. With his
profit he would build a bigger house, buy a bigger car
and cause jealousy with his neighbors. In five years
time more, other farmers would seek to enter the cattle
production field and copy his success. MEAT SUPPLY
would increase so all Cubans could eat meat three times
a week, instead of once and the DEMAND would start to
decline. With the decline of DEMAND, the competition
would force prices to fall and the PROFIT to be
reduced. Eventually an uneasy equilibrium would be
reached. This is called market place economics and is
the basis of national wealth and standard of living,
which translates into social programs for the
disenfranchised, through taxation of PROFIT.

The problem in Cuba is not the USA Embargo causing
poverty, or lack of meat, which it does not. It is
political party bureaucratic run planning systems that
create the poverty. PROFIT and SELF INTEREST are the
only processes that work to create economic wealth.
For well known emotional and pyschological reasons.

In Belize, economic growth is reliant on PROFIT also.
We must sell something to others. We sell our
recreational attractiveness and services to tourism and
we must sell our products abroad to get foreign
exchange. Only by selling something can we create a
profit making entrepreneurial class, that can pay taxes
and thus pay for social programs. While the Prime
Minister speaks of social programs for the poor, mostly
of the vote catching rhetoric needed in the major
political power seat of Belize City for the coming
election. Without a profit making entrepreneurial
class, there will be no social services safety net
possible. You need money to do that and money for
government programs comes from taxes. Printing more
money, or borrowing it, is a losing proposition longer
term. Taxes come from ENTREPRENEURIAL PROFIT. To do
social services you need money. To create money and
economic wealth in Belize, you need to service rapidly
the needs of Belizean entrepreneurs. The more money
they bring in to Belize as PROFIT, the more taxes and
success the nation will achieve for a rising standard
of living for all. SUPPLY AND DEMAND, the regulators
of PROFIT are based on competition. COMPETITION in
Belize where there is a small uncontrolled environment,
is usually small family operational scale. State
planning tendencies of Belizean bureaucrats and the
greed of political parties in an elected one party
dictatorial system such as ours, tend to slant toward
monopolies, that can enrich coffers of the controlling
political parties. This was well explained in last
week's Amandala newspaper article. Monopolies prevent
competition and thus PROFIT driven competition and
efficiencies disappear from the nation of Belize, when
in an EVER CHANGING COMPETITIVE environment, necessary
to adjust SUPPLY AND DEMAND, this gets replaced by
obsolescence and stagnation caused by a monopoly.

STATE PLANNING and POLITICAL interference are the
problems of CUBAN AND BELIZEAN economic growth, or the
ability to fight poverty. Politics and bureaucrats
need to stick to infra-structure construction and
maintainance and the leveling of the playing field for
entrepreneurial competition to create PROFIT. Their
only function is to expedite and service the population
requirements. Not control them.